Plan Ahead for New Business Return Due Dates

Now that the extended due dates for 2015 business and individual returns are behind us, it’s time to start preparing for the upcoming 2016 filing season.

New Due Dates. When making preparations for the 2016 filing season, you and your clients will need to plan ahead for altered due dates for some key business returns. A new tax law enacted at the end of 2015 revises the due dates for filing W-2 wage and tax statements, certain information returns, and C corporation and partnership income tax returns.

W-2s and 1099s. In prior years, W-2 forms were due to employees by Jan. 31 following the calendar year to which the forms relate, but were not required to be filed with the Social Security Administration (SSA) until Feb. 28. Moreover, the filing due date was extended to March 31 for employers that filed the forms electronically.

Effective for calendar years beginning after 2015, Form W-2 wage and tax statements and Form W-3 transmittal forms must be filed with the SSA on Jan. 31 of the following calendar year. Thus, W-2 forms for the 2016 calendar year will be due to the SSA by Jan. 31, 2017, the same day that W-2 forms must be provided to employees. The extended due date for electronic filers is eliminated.

The accelerated due date also applies to Forms 1099-MISC reporting non-employee compensation. Under prior law, those forms were due to payees by Jan. 31 and to IRS by the last day of February following the reporting year or by March 31 if filing electronically. The accelerated filing date does not apply to other information returns.

Related change. The accelerated due dates for these income-reporting forms are intended to enhance the ability of the IRS to match the income reported on an individual’s tax return with the amounts reported on Forms W-2 and 1099-MISC before issuing a tax refund. To that same end, the new law provides for deferred refunds for returns claiming either the refundable earned income tax credit or refundable child tax credit. Under the new rule, no refund will be made before Feb. 15 of the year following the calendar year to which the return relates.

Partnership returns. In prior years, partnership returns on Form 1065 were due on the fifteenth day of the fourth month following the close of the partnership’s tax year. As a result, returns for calendar-year partnerships were due on April 15th—the same due date as individual income tax returns.

For tax years beginning after 2015, partnership returns will be due one month earlier on the fifteenth day of the third month following the close of the partnership’s tax year. Thus, 2016 returns for calendar-year partnerships will be due on March 15, 2017.

Acceleration of the due date puts partnership returns on the same schedule as returns for S corporations. The change is intended to provide individual taxpayers with information on pass-through items from both partnerships and S corporations (on Schedule K-1 of Form 1065 for partnerships or Form 1120-S for S corporations) in advance of the April 15 due date for reporting those items on their individual income tax returns.

The revised law continues to provide for automatic extensions of the filing due dates. Under the revised rules, both partnerships and S corporations are entitled to an automatic six-month filing extension—making the extended due date Sept. 15 for calendar-year partnerships or S corporations. This change does not actually change the extended filing due date for partnership returns. Under prior law, partnerships were eligible for a five-month extension, which also extended the due date for calendar year returns to Sept. 15.

C corporation returns. While the new rules move up the due date for partnership returns, they delay the due date for most C corporation returns.

Under prior law, C corporation returns were due on or before the fifteenth day of the third month following the close of the corporation’s tax year—that is, March 15 for calendar-year corporations. Under the new rules, returns for tax years beginning after 2015 are generally due on the fifteenth day of the fourth month following the close of the tax year. Thus, C corporation returns for the 2016 calendar year are due on April 18, 2017 (April 15 is a Saturday)—the same due date as individual income tax returns.

As under prior law, the new rules generally provide for an automatic six-month extension of the return due date. However, for any C corporation return for a calendar year that begins before 2026, the automatic extension will be limited to five months. Thus, the extended due date for C corporation returns for calendar year 2016 will be Sept. 15, as under prior law.

June 30 fiscal years. For C corporations with a fiscal year ending June 30, the revised due date will not apply until tax years beginning after 2025 (i.e., the tax year beginning July 1, 2026, and ending June 30, 2027). Until then, returns for such corporations continue to be due on the fifteenth day of the third month following the close of the tax year— that is, Sept. 15 following the close of the year. Until 2026, the automatic extension for C corporations with a fiscal year ending June 30 will be seven months.

Editor’s note: Please note, an earlier version of this article incorrectly stated that the C corporation and individual return due date was April 17 instead of April 18. You can find more tax law updates from Intuit® ProConnect™ here.